Challenging market conditions have caused superannuation funds to have its fifth negative month for the financial year, according to latest data by SuperRatings.
The median balanced option was down 0.5 per cent in February with the financial year-to-date return falling to -1.5 per cent.
SuperRatings founder Jeff Bresnahan, said most funds recorded a small loss for the first eight months of the year.
“A key challenge for members remains growing their balances to meet their retirement needs. This involves working to maintain exposure to growth assets that have performed well over the long-term, while ensuring risk is minimised,” he said.
The SuperRatings report said Australian markets continued to face headwinds in February with the ASX200 Accumulation Index down 1.8 per cent for the month. Telecommunications, technology, and financial stocks fared poorly, while resources and materials stocks clawed back some of their January losses.
“Higher growth portfolios have borne the brunt of market volatility, although it is expected that most members invested in these options are earlier in their accumulation phase and have a higher ability to withstand these conditions,” Bresnahan said.
“Capital stable options, which are much more likely to be used by members in and around retirement, recorded a 0.05 per cent fall for the month but remain in positive territory for the financial year to date.”
Cash and diversified fixed interest returns remain subdued, with the median cash and diversified fixed interest options up 0.2 per cent and 0.5 per cent respectively, although these returns were some of the strongest for February, the report said.
